James Pethokoukis

IMF ups its estimate for 2010 global growth

October 1, 2009

Another unsurprising economic forecast that portends continued high US unemployment next year.

10 reasons why the US economy will stay weak

September 25, 2009

From David Goldman’s Inner Workings blog (the actual post of chock full of charts, expanded explanation):

Is the US economy suffering from hysteresis?

September 25, 2009

That is, has the economy snapped in such a way that it can’t bounce back to its previous form? This might be true in the labor market. Mark Thoma takes a shot at the issue:

WH adviser Romer: ‘Cringes’ at talk of exit strategy

September 25, 2009

CEA Chair Christina Romer at the Chicago Fed:

The economic historian in me cringes every time I hear mention of “exit” from fiscal
stimulus and rescue operations in the current situation. “Exit strategy” is one thing—of course
we should be planning for the time when private demand has recovered and governmentstimulated
demand can be withdrawn. But to talk seriously about stopping policy support at a
time when the unemployment rate is nearing 10 percent and still rising is to risk nipping the
nascent recovery in the bud.

The mild ‘W’ scenario

September 16, 2009

Yardeni sketches it out, though he thinks a “muddling along” is more likely:

1) Actually, the Petering Out scenario could start before yearend. Auto sales were clearly boosted during July by the Cash for Clunkers program. Congress expanded the program by an additional $2bn in August, and auto sales continued to rebound. Auto sales will probably weaken again unless it is renewed. Also, an $8,000 tax credit for first-time homebuyers will expire in November.

The Japan comparison

September 16, 2009

David Rosenberg draws an uncomfortable parallel:

Speaking of Japan, and we say this because the U.S. is following a very similar post-credit collapse pattern, we note that the Nikkei posted six 20%+ rallies since its bubble burst in 1990 and no fewer than four 50%+ rallies.  … So actually there is nothing in this flashy move off the lows in the S&P 500 that is inconsistent with a pattern of a bear market rally — this is not the onset of a whole new sustainable bull market.  … They are not premised on improved fundamentals, despite data that are skewed to the upside by rampant government intervention. Just remember, nobody built more bridges or paved more river beds to skew the economic data than the LDP did in Japan for much of the 1990s. With U.S. T-bill yields close to zero, as they were in Japan, we have at least one market — the money market — that sees what we see, which is an economic outlook fraught with fragility, as is typically the case after a secular credit expansion moves shifts into reverse.